Monday, July 07, 2008

Apparently even the Planning Minister isn't aware of the plan 

There is incompetence, and then there is incompetence. Of late, the Venezuelan government has been suffering a lot from the latter.

Recently the wisdom of some of the government's economic policies have been much debated on this blog. Of course, while these debates are interesting and important there is actually a limit to how far we can go with them. After all, given that there is no written plan as to what the Venezuelan government is trying to do with the economy it is hard to compare its actual policies to what it should or intends to do.

That is, no one knows what it is trying to do - apparently, it turns out, not even its Development and Planning Minister. Witness these statements by Planning Minister Haiman El-Troudi:

El ministro El Troudi también negó que el bolívar esté sobrevaluado y recalcó que su valor es el apropiado en relación con el resto de las divisas que operan en el mundo.

Finalmente, reiteró: “No está planteado, en lo absoluto, la devaluación de nuestra moneda nacional. Eso se mantiene firme y solamente a través de algunos intereses particulares es que se especula en torno a la necesidad de devaluar. No está planteado porque sencillamente, tal como lo indican nuestros estudios, el tipo de cambio seguirá en 2,15 bolívares fuertes por dólar”.

which more or less translates as:

Minister El Troudi also denied that the Bolivar is overvalued and restated that its value is appropriate in relation with the rest of the currencies that circulate in the world.

Finally, he reiterated: "It is absolutely not planned for there to be a devaluation of our national currency. It remains firm and it is only certain private interests that speculate with regard tot he need to devalue. That is not being considered simply because, as our studies indicate, the exchange rate will continue being 2.15 Bolivares Fuertes per dollar.

Now, those who have followed the discussions on the economy here know that it has been pointed out repeatedly how overvalued the Venezuelan currency is and that even economists allied with the "process" see that clearly. Some in the comments section have argued, rightly or wrongly, that overvaluation could well be an intentional policy to help make the importation of capital goods cheaper.

Ok, that is one plausible explanation ... but if that is the plan apparently the Planning Minister hasn't been let in on it yet. As a result, rather than helping to educate the Venezuelan public by telling them that the overvaluation is part of a plan to import more capital goods (if that indeed is the purpose of it) he takes the totally insane/asinine/bullshit/dishonest/clueless/head up his ass (pick one) position that the Bolivar is NOT overvalued.

I defy anyone to fly down to Venezuela, go to the Italcambio exchange house in the airport, change their money at the official rate of 2.15 BsF per dollar, pass one day spending those Bolivares, and THEN tell me the Bolivar isn't way overvalued.

WARNING: you will probably need to visit a rape counseling center after doing this little experiment because even though you might not exactly have been raped you sure will FEEL like you have been.

Anyways, it is hard for me to feel good these days about where all this is going when this is the type of people they have at the helm. And I know some have taken great umbrage at my portraying those in the government as being a bunch of inept clowns.

Ok, maybe they aren't clowns. But you do have to admit, the resemblance is striking.

Can you tell which is the Venezuelan Minister for Planning and Development?

(for the answer see the comments section)


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